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REPORT 



OF THE 



COMMITTEE 



OF THE 



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OF 



PENNSYLVANIA 

TO WHOM WERE REFERRED THE MESSAGE OF THE GOVERNOR AND 
SUNDRY MEMORIALS RELATING TO THE ABOLITION OF 

LOTTERIES. 



Read, February 10, 1S32, 

BY 

llr. DTXL.OP, Chairman, 



HARRISBURG: 
PRINTED BY HENRY WELSH, 



1832, 



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• i 



REPORT 



UPON 



LOTTERIES. 



The committee to whom was referred that portion of the mes- 
sage of the Chief Magistrate, and the several memorials relating 
to the abolition of lotteries— RESPECTFULLY REPORT: 

That full j aware of the responsibility imposed upon them, they 
have bestowed upon the subject submitted to their consideration 
the laborious investigation to which it was entitled. Sensible of 
the evils arising from the prosecution of lotteries, and that the 
picture which has been drawn of the enormous extent to which 
they have been carried, and the appalling consequences which are 
daily flowing from this miserable plan of finance, under the al- 
leged sanction of the commonwealth; they could not but feel the 
strongest disposition to eradicate this cancer from the bosom of 
the state. 

A lottery is at best but systematized gambling, a splendid lure for 
the unwary, in which the chance of remuneration to the adventurer 
is in no proportion to that of any other mode of gaming. Yet, like 
the Mirage of the desert, it lures and deceives, not only the un- 
conscious, but the most practised beholder. The old and young, 
the economist and the spendthrift, the knowing one and the inno- 
cent, the poor man and the rich, with equal eagerness, crowd 
around this gorgeous temple of fortune, and though to-day the 
dupes of its deceitful promises, return to morrow with eyes as 
anxious and inquiring, to gaze upon and seek the glittering favors 
it aft'ects to otter. In its insatiable coffers are consumed as well 
the pittance of the poor as the thousands of the wealthy, and 
though the one may be kept destitute, and the other become the 
victim of bankruptcy, still the occasional prize that is blindly 
lavished, crowds the portals with its deluded devotees. Every 
device that can entrap the unwary, and allure the giddy, is invent- 
ed and displayed, and a glare as false as it is flattering, that only 

" — • leads to bewilder, and dazzles to blind," 

deceives from day to day the victims of its delusion. 

There may be other grants ot lotteries made in unwary mo- 
ments by the legislature, to other institutions, which time and 



circumstance have probably rendered obsolete; but the only one 
in active operation is exercised by the Union Canal company, an 
institution which seems to have been in some measure a deserving 
favorite of the public: and your committee, though anxiously dis- 
posed to cut off this monstrous system of imposition, practised 
under its authority, have yet been too strongly impressed with the 
propriety of respecting the rights of the corporation and of individ- 
duals, and preserving untarnished the public faith, to recommend 
such a measure, without the most sedulous scrutiny, and confident 
assurance of their own conclusions. Feeling the great responsi- 
bility they were under, in deciding upon property to a great 
amount, upon perhaps the future prosperity of the Union Canal 
company, upon the guarantee of the state on the faith of which 
nearly half a million of dollars had been invested, they invited 
and enjoyed a full, laborious and able discussion of the whole 
subject, by counsel on the part of the memorialists, the company 
and their assignees. 

As the power to abolish lotteries, as prayed for by the memorial- 
ists, and recommended by the Governor, will depend on a proper 
construction of the acts of assembly, which have conferred upon 
the Union Canal company the privilege of raising money by way 
of lotteries, the committee beg leave, as briefly as the discussion 
will permit, to place their views upon this subject before the 
House. 

The Union Canal company of Pennsylvania was so called from 
its being formed of two separate companies, which had been 
authorised to connect the waters of the Delaware and Susquehan- 
na, more than forty years ago. The earliest of them, denomina- 
ted the Schuylkill and Susquehanna naTigation company, was in- 
corporated by an act passed twenty- seventh September, seventeen 
huudred and ninety-one; the other, called the Delaware and 
Schuylkill canal navigation, was erected by an act of the tenth 
of April following; In eighteen hundred and elev°n these com- 
panies were united and re organized, by an act of the second of 
April of that year, under the style and title of "the Union Canal 
company of Pennsylvania;" and under that name have brought 
their arduous and meritorious exertions to a successful termination. 

These companies, and especially since their connexion, have 
claimed and enjoyed from time to time the continued and foster- 
ing care of the government. So early as seventeen hundred and 
ninety-five, by an act passed seventeenth April of that year, the 
legislature, to provide efficient funds for completing the canals, 
authorised the two companies "to raise by way of lottery," four 
hundred thousand dollars, of which two hundred and sixty-six 
thousand, six hundred and sixty six dollars, sixty -seven cents, 
were to be applied to carrying on the works of the Schuylkill and 
Susquehanna navigation, and one hundred and thirty-three thou- 
sand, three hundred and thirty-three dollars and thirty-three 
cents, to carrying on the works of the Delaware and Schuylkill 
canal navigation, and which was not to form any part of the capi* 
tal stock. 



Finding it inconvenient to raise the sums authorised to be raised 
* 'whilst acting jointly, where a separate interest existed," the 
latter company was authorised to raise "their proportions of the 
provisions granted" by the act of seventeen hundred and ninety- 
five, unconnected with the other company. 

After nearly twenty years of the exercise of their corporate pow- 
ers, after the enjoyment of fifteen years of their lottery privileges, 
these companies in their memorial to the Legislature of thirteenth 
of December, eighteen hundred and ten, after lamenting the un- 
productiveness of the lottery grant, after complaining of "the 
disorder and embarrassment into which they had fallen, " the "re- 
proach and ridicule with which their undertaking was covered, " 
of "the public confidence being impaired" in their efforts, and ac- 
knowledging "the spirit of unlimited speculation," which marked 
their commencement, and embarrassed their operations, they pray- 
ed the Legislature to aid them with appropriations and to unite 
them under one direction. In pursuance of this request, the Le- 
gislature, by an act passed the second of April, eighteen hundred 
and eleven, united them as has been already stated, into one com- 
pany called the Union Canal company of Pennsylvania, and con- 
ferred upon them further privileges and powers, which become the 
subject of particular examination. The twenty eighth section of 
this act assuming that the two companies had realized about sixty 
thousand dollars, of the four hundred thousand dollars, they had 
been authorised to raise, by the act ot seventeen hundred and 
ninety-five, authorises the raising of ihe residue of the original sum 
not exceeding three hundred and forty thousand dollars, and confer 
the additional power 4 if it should appear to them adviseable to sell 
and assign to any person or persons, body politic or corporate, the 
right to raise the said residue of money by way of lottery or lot- 
teries, upon such scheme or schemes, plan or plans, as they may 
from time to time sanction, or any part thereof from time to time," 
and that "such purchasers or assignees shall be vested for the 
term they shall so acquire, with the same rights and privileges as 
the said corporation. " 

The expectations of the company from the power given by this 
act to sell and assign wholly or from time to time, their privileges to 
raise money by way of lottery not having been answered, the Le- 
gislature to promote their views, by an act of the twenty ninth of 
March, eighteen hundred and nineteen, authorised a further sub- 
scription of two thousand five hundred shares and as an induce- 
ment to new subscribers to invest their mon?y, by the third section 
pledged the proceeds of the lottery as a fund for the payment of six 
per cent, upon the new subscription, and also upon the un forfeited 
shares ot the old companies, "as soon as the two thousand five hun- 
dred dollars shall have been subscribed" the interest upon the old 
stock to commence from the time and in the proportion of the new 
subscription. The pledge of the lottery proceeds to the payment 
of six per cent, upon the stock having failed to induce the expected 
new subscriptions; the company taking advantage of the current 



of popular opinion which was then letting in favour of internal im- 
provement, procured in eighteen hundred and twenty-one, further 
enactments of the Legislature, upon the construction of which the 
chief difficulty of deciding the imporant questions submitted to the 
committee mainly depends. 

The fiist section of the "act for the improvement of the state,'* 
above alluded to passed twenty-sixth March eighteen hundred and 
twenty-one, after providing "that whenever according to the act" 
of eighteen hundred and nineteen, which as just stated empowered 
the further subscription of two thousand five hundred shares to the 
capital stock of the Union Canal company, two thousand two hun« 
tired and fifty should be subscribed, the Governor was required to 
subscribe on behalf of the commonwealth two hundred and fifty 
shares, and then proceeds as follows,* 

44 Section 1. Be it enacted by the Senate and House ot Repre- 
sentatives of the Commonwealth of Pennsylvania in General As- 
sembly met, and it is hereby enacted by the authority of the same, 
That whenever according to the provisions of the act supplemen- 
tary to an act, entitled "An act to incorporate the Union Canai 
company of Pennsylvania,'' passed the twenty-ninth day of March, 
e ghteen hundred and nineteen, two thousand two hundred and 
fifty shares shall have been subscribed to the capital stock of the 
Union Canal company of Pennsylvania, the Governor of this com- 
monwealth be, and he is hereby authorised and required to sub- 
scribe in behalf thereof, two hundred and fifty shares of the stock 
of said company, to be paid by the State Treasurer on warrants 
drawn by the Governor, in the proportion of the payment made on 
subscribing by the new subscribers, and of the payment of their 
respective instalments as may be called for by the board of mana- 
gers; and if the proceeds of the lottery granted to the Union Canal 
company, together with the tolls whuh may be collected, shall not 
hereafter from year to year for the period of twenty-five years, 
yield a sum equal to an annual interest of six per cent, upon all 
sums not exceeding in amount four hundred and fifty thousand 
dollars, which may be subscribed by new subscribers as aforesaid, 
and paid according to law to the capital stock of the said compa- 
ny, the Governor shall from year to year for the term of twenty- 
five years, whenever it shall appear to his satisfaction that such 
disability exists, draw his warrant on the State Treasurer in favor 
of the said board of managers, for the amount of such deficiency, 
which money shall be applied to the payment of an annual interest 
of six per cent, to such new subscribers, and the faith of the com- 
monwealth is hereby pledged for the term ot twenty rive years, for 
the full and punctual payment of said interest: Provided, That the 
subscriptions shall be paid in such instalments as shall be called 
for by the managers of the said company, and each subscriber shall 
be entitled to interest only from the time of the actual payment ot 
each instalment respectively; and in order to avoid as far as possi- 

NOTE — The two thousand two hundred and fitly shares, at two hundred dollar: 
per share, makes the four hundred and fifty thousand dollars, 



ble all disability to pay such interest, so much of the third section 
of the act aforesaid, as pledges any portion of the avails or nett 
proceeds of the lottery aforesaid, to the payment of an annual in- 
terest to the holders of shares not forfeited in the late Delaware 
and Schuylkill, and Schuylkill and Susquehanna Canal companies, 
be, and the same is hereby suspended until the canal shall be com- 
pleted, and the president and managers of said company shall be, 
and they are hereby authorised to continue during the said term of 
twenty-five years, to raise by way of lottery any sums that may 
be wanted tor the purpose of paying to the holders of said stock, 
the six per cent, as aforesaid: Provided, That whenever the nett 
proceeds of the tolls shall amount to the said six per cent, the pri- 
vilege hereby granted ot raising money by lottery, shall during 
such time be suspended, except so far as is authorised by existing 
laws, and it shall in no event be lawful to divide any sum arising 
from said lottery over and above six per cent, upon the stock of 
said company, it being the intent and meaning of this act, that all 
such excess shall be reserved to meet any deficiency thereof, that 
may at any time occur in the tolls as aforesaid." 

The old companies and the Union Caual company had, under 
the several acts of Assembly specified, proceeded in the exercise, 
of their lottery privileges with various success. During the first 
fifteen years,from seventeen hundred ninety-five till eighteen hun 
dred and eleven, when the two companies were united, they were 
conducted, of course, under their own management, there being 
no authority to sell or assign prior to the passage of the latter act. 
During that period they had realized about sixty thousand dollars, 
or at the average of about four thousand doliars per annum. Since 
the authority to sell and assign, given by the act of eighteen hun- 
dred and eleven, the company have drawn no lotteries themselves, 
but have conducted them through the medium of assignees. 

On the seventh April, eighteen hundred and twelve, about a 
year after the incorporation of the Union Canal company, they 
sold and assigned absolutely to Henrv Pratt, "all the right, privi- 
lege and authority, to make lotteries within the state of Pennsyl- 
vania." Mr. Pratt was to deduct, from the gross amount of each 
class, fifteen per cent, and pay the company two and a halt per cent, 
clear of all expenses, upon the two first classes, and five per cent, 
on each succeeding class, The lotteries, at this time, were in a 
state of great depression, and Mr. Pratt, with all his ability, made 
but little profit on the adventure. The company, conceiving they 
could procure more favorable terms elsewhere, prevailed upon Mr. 
Pratt to re-assign the privilege to them for fifteen thousand dol- 
lars, and on the thirty-first March, eighteen hundred and fourteen, 
sold on the same terms, except the amount which had been raised 
by the first class, under the management of Henry Pratt," to Ben- 
jamin Betterton Howell. The next contractor of the company was 
Solomon Allen, who drew the fourth, fifth, sixth, seventh, eighth, 
and ninth classes, the first having been drawn by Mr. Pratt, and 
the second and third by Mr. Howell. The company, by the first 



contract with Mr. Allen, which is dated thirteenth January, eigh= 
teen hundred and seventeen, sold and assigned to him " the right, 
privilege and authority, to raise, by way of lottery, within the 
state of Pennsylvania, so much of the sum of money which, by 
the act of Assembly, it is permitted to the said company to raise 
by a lottery or lotteries, as can be produced by the scheme and 
plan hereto annexed,'* for which he was to pay ten thousand five 
hundred dollars. The other live classes which Mr. Allen drew 
were authorised from year to year by contracts, couched in similar 
language as respects the power conveyed; the last of them for the 
ninth class, being dated ninth March, eighteen hundred and twen- 
ty-one. 

Thus far the schemes of no one year, as will be perceived by 
the synopsis of them hereafter furnished, exceeded much half a 
million of dollars. It was left for the adventurous spirit of the 
present contractor, Archibald MTntyre, to push these bold efforts 
at speculation to an annual aggregate of upwards of five millions. 

The first contract with him is dated on the seventh October, 
eighteen hundred and twenty-one, about five months after the 
passage of the act of Assembly ot that year, under the provisions 
of which the company claims to exercise the power of additional 
lottery privileges. The contract professes, " by the authority vest- 
ed in the president and managers of the Union Canal company of 
Pennsylvania, by the twenty-eighth section of the act of Assem- 
bly, passed the second day of April, eighteen hundred and eleven," 
to sell and assign "unto the said Archibald M'Intyre, the right, 
privilege and authority to raise, by way of lottery, in the state of 
Pennsylvania, so much of the sum of money which, by the said, 
or any subsequent act of Assembly, it is permitted to the said 
company to raise by way of lottery or lotteries, as shall be produ- 
ced by such schemes or plans of lottery as shall be adopted by the 
said Archibald M'Intyre, within three years from the first of 
November" then next, for which he engaged to pay them eleven 
per cent, on the amount of each scheme, and that he will not draw 
a less sum than one hundred and fifty thousand dollars in each 
and every year. It is stipulated, also, on the part of the company, 
that his friend John Yates, of New York, or some one named by 
him, in case of contractor's death, shall have the management of 
the lottery privilege transferred. On the seventh of October, 
eighteen hundred and twenty-four, the company entered into a 
new contract with Mr. M'Intyre, to terminate on thirty-first De- 
cember, eighteen hundred and twenty-nine, on terms similar to 
the one preceding, except that he is to pay one hundred and fifty 
thousand dollars in several payments and as a gross sum, and not 
a per centage was to be paid: the extent to which he is to carry 
the privilege is left without any stipulations of requisition or re- 
striction. On the twenty-first September, eighteen hundred and 
twenty-nine, a few months before the grant of eighteen hundred 
and twenty-four would have expired, they entered into another 
contract for two years from the first January, eighteen hundred 



and thirty, by which he engaged to pay the company thirty-thou- 
sand dollars per annum, for such schemes as he might adopt. The 
contract now subsisting between Mr. M'Intyre and the compa- 
ny, and under which he is at this moment rapidly projecting his 
lottery schemes, is dated the sixth day of September last, 
and transfers to him " the right, privilege and authority, to 
raise by way of lottery, in the state of Pennsylvania, so much of 
the sums of money which, by the said acts, or any other acts of 
Assembly, it is so permitted to the said company to raise by way 
of lottery or lotteries, as can be produced by such schemes or 
plans of lotteries, as shall be adopted by the said Archibald 
M'Intyre, for two years" from the first Jannary, eighteen hun- 
dred and thirty-two. The committee deem it of some importance 
to call the attention of the House to the change of phraseology 
adopted by the two last contracts. In those of eighteen hundred 
and twenty-one, and eighteen hundred and twenty-four, they state 
their authority to be derived from the act of eighteen hundred and 
eleven alone, in these terms: 4 * and by the authority vested in the 
president and managers of the Union Canal company of Penn- 
sylvania, by the twenty eighth section of the act of Assembly, 
passed the second day of April, eighteen hundred and eleven, 
have agreed to sell ahd assign," &c. Whether they opened their 
eyes to new views upon their corporate privileges, were grown 
careless of public scrutiny, or changed their legal advisers, cer- 
tain it is the company seem, in their two last assignments, to have 
taken more extensive ground than they had conceived themselves 
entitled to occupy before. Tn the recital of theirauthority in the con- 
tracts of eighteen hundred and twenty-nine and eighteen hundred 
and thirty one, they look not merely as they had done before to the 
act of eighteen hundred and eleven, probably for the first time, in 
eighteen hundred and twenty-nine, construing the act of eighteen 
hundred and twenty-one as conferring a cumulative and distinct 
grant, and not requiring the aid of the old lottery to raise the six 
per cent, for the new subscribers. The contracts of eighteen hun- 
dred and twenty-nine and eighteen hundred and thirty-one, recite 
their authority thus: '* That whereas, by an act of Assembly of 
the commonwealth of Pennsylvania, passed the second day of 
April, eighteen hundred and eleven, entitled," &c. in the twenty 
eighth section thereof, the said company is permitted, among other 
things, to sell and assign to any person, &c. the right to raise a 
sum of money not exceeding three hundred and forty-thousand 
dollars, by way of lottery or lotteries, upon such schemes, &c. as 
they may sanction, &c. ; and proceed to add, what is not inserted 
in the other contracts of Mr. M'Intyre, the following clause: 
44 And whereas, by the first section of another act of Assembly 
of the commonwealth of Pennsylvania, entitled An act for the 
improvement of the state, passed the twenty-sixth March, eighteen 
hundred and twenty-one, the president and managers of the said 
company were authorised to continue, during the term of twenty 
five years therein mentioned, to raise by way of lottery, any sums 
that may be wanted," &c. 



10 

These clauses when connected with the short period of time at 
which the latter contracts are taken, have too strong a beating upon 
the argument which it is purposed to submit upon the construction 
of the powers and privileges conferred upon the Union Canal Com- 
pany of drawing lotteries, to be omitted. 

It is from the date of the contract of eighteen hundred and 
twenty four, that Mr. M'Intyre has launched out into the most 
lavish use of the power he fancied or pretended to fancy he held 
of speculating upon the cupidity of his fellow citizens. The com- 
mittee call the attention of this house to the exemplification of the 
boundless spirit of rapacity which actuates men in the pursuit of 
wealth to be drawn from the giddy propensity to gambling and 
chance. It is manifest from the terms of the first contract in which 
it was deemed necessary to require him to draw schemes to the 
amount of one hundred and fifty thousand dollars a year, that neith- 
er he nor the company dreamed of the prodigious extent to which 
the credulity of the people could be practiced upon. These im- 
pressions are strengthened by casting the eye over the list of 
schemes drawn under his first contract in eighteen hundred and 
twenty-two, eighteen hundred and twenty-three and eighteen 
hundred and twenty four, during which they did not in any one 
year much exceed three hundred thousand dollars. But in proportion 
as his hopes are expanded, as new contrivances to facilitate the con- 
venience and rapidity of drawing lotteries are invented, as the 
votaries of fortune crowd around him to snatch the splendid delu- 
sion, he seems to acknowledge no limits to their extent but the 
capacity of the people to buy. From the time of his second con- 
tract, under which he pays no more for drawing millions than he 
does under the first for drawing thousands, he seems to have 
launched into an illimitable ocean of profit and speculation. His 
annual schemes progressively swell from three hundred and eigh- 
teen thousand three hundred dollars in eighteen hundied and 
twenty four, to five million two hundred and sixteen thousand two 
hundred and twenty dollars in eighteen hundred and thirty- 
one. If these alarming strides of rapacity in getting, know no 
check, if they defy all power to stay them, and make from th? 
last to the present year, the same proportionate rapidity of ad- 
vance as they did from eighteen hundred and twenty nine to eigh- 
teen hundred and thirty, we shall perceive a stream of more than 
ten millions of dollars pouring from the pockets of the people into 
the insatiable coffers of the lottery broker in this one lottery alone. 
It is foreign to the subject under consideration to which the com- 
mittee desire strictly to confine themselves, to go into any estimates 
of other and foreign lotteries that spread their baleful influence over 
the United States, and of which Pennsylvania receives her full 
share of sickening venom; but there is little doubt upon even a 
moderate estimate, that those drawn under the auspices of this 
same contractor, yield a nominal profit, and probably an actual 
gross profit of more than fifty thousand dollars a day. We may 
form some conception of the appalling magnitude of a system of 
gaming, incitements to which are displayed in such winning phrase 



11 

and alluring profusion in the streets of our cities that yields to those 
who minister to the cupidity of their fellow citizens such enor- 
mous receipts. When we know that the power of checking these 
monstrous fungi on the body of the state, as deadly as the cholera 
of the Indies, is placed in the hands of the company, and perceive 
her casting over them the shadow of her indifference or indulgence 
to shield them from the light of public scrutiny and criminal pun- 
ishment, we must all acknowledge the necessity of eradicating those 
that afford protection and plausibility to |he rest. Does not this 
state of things call loudly for redress from the public guardians 
of the morals of the people, from a government whose duty it is to 
protect the credulous and unwary, to remove all temptations to vice, 
and to suppress the inordinate pursuits of wealth, by chance and 
gaming. Shall we be arrested in such a hallowed purpose by 
vague statements that these lotteries are not such sources of wealth 
to the broker who projects them, when the assertion is so manifest- 
ly refuted by the extent to which they are carried. If they were 
not a source of profit and gain why project and conduct them, if 
their advantage were not proportionate to their magnitude and 
number, why extend and increase them. It were well were we 
as surely persuaded of the loss of the broker as of that of the 
adventurer who buys. We would then need no legislative provi- 
sions to suppress their evils. 

Your committee having thus given a sketch of the lottery his- 
tory of the canal company as concise as the perfect understanding 
of the subject will permit, they now beg leave to present to the 
House as well the construction of the privileges contended for by 
the company and their assignee as the conclusions to which the 
committee have arrived after the patient and attentive examina- 
tion they have bestowed upon the subject. 

In the first place it was ardently contended by the counsel of 
the company and their assignee, that the new subscribers had 
vested their money upon the pledge of the public faith, as given in 
the act of eighteen hundred and twenty-one, already recited; that 
under the sanction of the commonwealth Mr. M'Intyre, had en- 
gaged in extensive contracts and relations which it would be diffi- 
cult or impossible to close, short of the limit of his last engagement j 
and that the resumption of the grant would involve the company 
Mr. M'Intyre, and the purchasers of unfortunate tickets in end- 
less and vexatious law suits. But assuming this to be true, the 
committee are of opinion that the consequences that would flow 
from any decision t adverse to the lottery privilege as pursued, 
cannot enlarge or limit the extent of the grant, or the construc- 
tion of the acts of assembly, and that the continuance of the 
evils of such an extensive system of gaming is more pernicious 
than all the disasters that can possibly flow from measures of res- 
triction; and that however indulgently the committee may be dis- 
posed to look upon those who may be zealously, though erroneous- 
ly, pursuing their endeavors to promote the public weal, they 
cannot extend an ill judged lenity to those who are seeking their 



12 

own advantage, regardless of its injurious operation upon the hap- 
piness of their fellow citizens. It certainly does not become 
those who run into errors to fill their coffers at the expense of 
public morals, to complain of the sad consequences to which they 
may be reduced by the withdrawal of privileges which they should 
never have exercised. But the committee cannot acquiesce in the 
opinion that any disastrous results will be experienced even by 
the participites criminis from closing these avenues of ruin and 
vice. 

The faith of the commonwealth is pledged, it is true, to the 
new subscribers for the receipt of six per cent, on their subscrip- 
tion of four hundred and fifty thousand dollars, subscribed by 
them in consequence of the passage of the act of eighteen hun- 
dred and twenty-one. But that pledge is only conditional, and 
to attach, under a certain concurrence of circumstances. But 
who are these new subscribers, in what relation do they stand? 
The counsel who argued for them ingeniously enough, seemed to 
wish them to be viewed as a body detached from the company, 
and to have the engagement of the state to them considered as 
distinct from a pledge to the company; but they are in fact the 
company. They would have constituted a portion of the compa- 
ny ipso facto, by the very act of subscription itself, but the fourth 
section of the act of eighteen hundred and nineteen, as if for fear 
any one would be so absurd as to question their incorporation with 
the rest of the subscribers, expressly confers upon them "authority 
to exercise when organized, all the privileges and immunities con- 
ferred on the (then) present stockholders. V They constitute there- 
fore a constituent portion of the company, and a very large portion 
too, when we consider that the old stock of the company is but 
one hundred and forty seven thousand, six hundred dollars, whilst 
the new (independent of the fifty-thousand dollars held by the 
state,) amounts to four hundred and fifty thousand dollars, nearly 
three fourths of the whole capital of the corporation. The pledge 
of the corporation therefore was in reality to the company, espe- 
cially when we reflect that the new subscribers in fact have the 
exclusive management, and refuse participation in its direction to 
the old ones. If therefore the company have transgressed the 
conditions ol the grant; if they have fully enjoyed what was ten- 
dered to them their claims upon the state are exhausted. She had 
only pledged her faith to furnish what would be wanted to pay six 
per cent, to stockholders, provided the avails of the privilege of 
raising money by lottery, and the nett proceeds of the tolls, were 
not adequate to cjo so. The case therefore resolves itself into 
this question, has the company raised by way of lottery all they 
were authorised to raise, have they had the full enjoyment of the 
privilege of drawing lotteries, have they by themselves and their 
assignees, raised from the nett proceeds of their schemes as much 
as would pay up the six per cent, upon the stock to this period, 
or for the twenty-five years; or if not would the nett proceeds of 
the tolls, if applied to such purpose, be sufficient? If they have. 



13 

raised the money they were authorised to raise by way ot lottery, 
if they have enabled their assignees to do so by incautiously dis- 
posing of the power for less than it is worth, or if the tolls here- 
after will cover the six per cent upon the stock for twenty-five 
years from eighteen hundred and twenty-one, the state is liberated 
from her pledge tor the peculiar circumstances under which her 
liability was to arise, cannot occur, her engagement being express- 
ly confined to supplying any deficiency in the sums to be raised 
by the lotteries and tolls of the company. 

The committee have not deemed it necessary to investigate the 
point, whether the grant under which the lottery privileges are 
enjoyed, is to be construed most favorably for the commonwealth 
or the company, for the natural and obvious meaning of the act 
requires not the introduction of the doctrine. And before they 
state their grounds of construction, they conceive it proper to say 
that they consider it immaterial to the correct understanding of the 
privilege, whether it were conferred as a bounty, or for any other 
purpose. They hold that grants, by way of bounty, are as precise 
in their limits, as any other legislative enactments, and to be scru- 
tinized upon the same principles. Considering the gift of the lottery 
privilege as a bounty, may be important when viewing it in re- 
ference to the application of its proceeds, but the committee cannot 
perceive what operation the viewing it in that light can have upon 
the ascertainment of its limits. 

It was argued for Mr. MTntyre, that he had embarked in heavy 
contracts upon the faith of the commonwealth, and was therefore 
entitled to the most favorable aspect that the subject was suscepti- 
ble of. But granting the position to be correct, the committee are 
of opinion that even the most favorable view of his rights will not 
place him in the light he desires. It is certainly a well settled 
principle of law and common sense, that he who buys can obtain 
by the purchase nothing but what the vendor has a right to sell. 
When Mr. M'Intyre, therefore, purchases from the company what 
they had no right to dispose of, he acquires nothing by his pur- 
chase. If he is willing to enter into a contract for a privilege that 
is doubtful in its terms, and uncertain in its tenure, he must take 
his chance, and has no right to call upon the legislature to place 
him on more stable grounds than he has assumed himself. The 
able counsel under whose auspices he operates, must certainly 
have informed him of the slippery nature of his purchase, and it 
is probable the glittering prospect of success may have tempted 
him to venture. His contract for enormous gains was but a lotte- 
ry, and if he has this time drawn a blank, he cannot complain 
with any propriety, when he reflects how many blanks he has sold 
to others. But the act of Assembly, with peculiar caution, and 
as if to put an assignee of the company out of any conceit that 
he could purchase what they had no right to sell, and to prevent 
his clothing himself with the pretence of claiming more than he 
bought, expressly enacts that those who are purchasers or as- 
signees, shall be vested for the term they shall so acquire, with 



14 

the same rights and privileges as the said corporation. Now sure- 
ly, independent of the ordinary dictates of law and common 
sense if a purchaser can acquire only the. same right held by his 
assignor, he has no pretence to claim any thing more. 

We come then, after disposing of these preliminary positions, 
to inquire what rights and privileges the several. acts of Assembly 
have conferred upon the Union Canal company, of what they could 
dispose, and to what extent they are entitled to claim the guaran- 
tee of the state. 

They were authorised '« to raise by way of lottery," certain 
sums of money, and we are called upon to decide 

1. What is the meaning of the words "to raise by way of lot- 
tery." 

2. What sums they had power to raise. 

3. How much they have raised. 

4. Whether the state is discharged of her pledge to the com- 
pany. 

It was earnestly insisted that the company had a right to sell: 
absolutely, or from time to time, until the proceeds of such sale 
or assignments would amount to the sums they were authorised to 
raise; and that until the moneys they were authorised to raise by 
way of lottery were thus raised, the power of d' awing lotteries 
was not exhausted. On the other hand it was urged, that the clause 
"to raise by way of lottery," mean't that as soon as the nett pro- 
ceeds of the lottery yielded the sums required, it was raised; and 
that, as the company had a right to sell only the right they had 
themselves, that whether the avails of the lottery arose from their 
own management, or that of their assignees, was immaterial. 

'Ihe construction contended for by the company is obviously 
not the true one. The same phrase " to raise by way of lottery," 
is used in all the acts conferring the privilege in that of seventeen 
hundred and ninety-five, containing the original grant, in that of 
eighteen hundred and eleven, giving the power to sell, and in that 
of eighteen hundred and twenty one, enabling the company to 
continue the lottery to pay the six per cent, if necessary, and it 
must therefore be taken in the same sense, unless there is some- 
thing in the latter acts which varies the import given to it by the 
first, which your committee cannot perceive. iNow, by the act of 
seventeen hundred and ninety-five, the company were authorised 
" to raise by way of lottery," four hundred thousand dollars, and 
were to manage the matter themselves, not having the power to dis- 
pose of the privilege till eighteen hundred and eleven. Clearly, then, 
until eighteen hundred and eleven, whatever profits the companies 
were able to procure from the lotteries, was so much f* raised by 
way of lottery." The profits on the schemes was the amount pla- 
ced by the process in their treasury. It is only necessary to state 
the case to secure assent to so evident a proposition. When we 
examine the twenty-eighth section of the act of eighteen hundred 
and eleven, we find this phraseology: " That there shall be raised, 
by way of lottery, the residue of the original sum, not exceedifig 



15 

three hundred and forty thousand dollar* authorised to be raised 
by the president," &c. of the two old companies, M pursuant to 
an act entitled, An act to enable the president and managers of 
the Schuylkill and Susquehanna navigation, and the president 
and managers of the Delaware and Schuylkill canal navigation, to 
raise, by way of lottery, the sum of four hundred thousand dol- 
lars, passed the seventeenth day of April, seventeen hundred and 
ninety-five." Mad the company, after the act of eighteen hundred 
and eleven, continued to exercise the privilege as they had before, 
under their own management, instead of selling it, the profits on 
the schemes would assuredly have been " proceeds raised by way 
el lottery;"' for that act expressly says the three hundred and for- 
ty thousand dollars, was the residue of the original sum, and to be 
raised pursuant to the act of seventeen hundred and ninety-five. 
Although the act of eighteen hundred and eleven conferred a 
further privilege upon the company, "if it should appear to them 
advisable to sell and assign to any person or persons, body politic 
or corporate, the right to raise the said residue of money by way 
of lottery or lotteries, upon such scheme or schemes, plan or plans, 
as they may from time to time sanction, or any part thereof, from 
time to time; and such purchasers or assignees shall be vested for 
the term they shall so acquire, with the same rights and privileges 
as the said corporation." It did not thereby mean to increase the 
amount te be raised by such lottery privilege. 

Now it does seem to the committee that the construction of this 
•clause is too plain to be misunderstood. What, were the company 
to sell; any new right, any greater power than they could exercise 
themselves? No, but the right which they were authorised to use 
themselves, pursuant to the act of seventeen hundred and ninety- 
five. The use of the definite article too manifestly points to the 
right just recited, and ingenuity cannot torture the allusion to any 
other than that which the company would have possessed if they 
should not deem it advisable to sell. They had the power under 
this act ot raising a specific sum of money, or if they should 
deem it advisable to authorise some one else to do so. They had 
in their report of thirteenth December previous, complained bit- 
terly of its unproductiveness, and it is probable the trouble a board 
of managers would experience in drawing lotteries which were on 
the old, dull and tedious plan, induced them toh.sk the privilege 
of selling out entirely or occasionally. It was a niggardly boon 
to be sure, but they took it. They did deem it advisable to sell, 
and the first disposal they made of their new power was to make 
an absolute sale of it to Mr. Pratt. They sold to him for a per 
centage on the schemes, as already stated, but i ( they had sold 
to him for a gross sum, say one hundred thousand dollars, the com- 
pany would have been done with their right entirely. They re- 
purchased the right from ST r. Pratt, but suppose he had chosen 
to retain it, what right would the purchaser have had? Would he 
have a privilege to draw lotteries forever — to any extent — till the 
company would realize nut of the sale, the three hundred and forty 
thousand dollars? Surely not the latter, for having parted entirely 



16 

tvith the lottery privilege for less than the third of the sum they 
had authority to raise themselves, they could never get any thing 
more than the consideration of the sale, and so upon the absurd 
assumption that "to raise by way of lottery," means that the 
lotteries should be carried on until the company should realize 
from the sale the whole sum authorised to be raised, Mr. Pratt 
would have had a power with no limits of duration, a power of 
flooding the country with lotteries till doomsday. Did the legis- 
lature mean, in giving a limited power to the company, that it 
should be exercised without limits? Did they mean that the right 
to raise thousands should be construed into a right to raise mil- 
lions by their assignee? Did they mean that when they gave a 
power to sell a limited right, that as long as they choose to conduct 
it themselves/ it should be exercised within prescribed bounds, 
but if they sold this "same'* right, that their assignee should be 
invested with not only a greater power than they had themselves, 
but with a power to which no limits could be discovered. A con- 
tract is to be construed in the light in which each party under- 
stands it, and it seems to your committee indisputable that the 
legislature and the company could have viewed this one in no 
other sense than that if they disposed of the privilege their as- 
signee had the right to raise by way of lottery, a sum not exceed- 
ing three hundred and forty-thousand dollars, that he had authori- 
ty to raise only what the company could have raised, had they 
retained it in their own hands. 

But suppose, instead of putting the case of an absolute sale, we 
put it as it has been exercised (since the re-purchase from Mr. 
Pratt,) by occasional assignments from year to year, or for a term 
of years, and suppose the broker to whom they assign for a term 
should agree to give them only one thousand dollars per annum, can 
it be believed that the legislature meant that he should have the 
power of continuing his speculations for three hundred and forty 
years; that in defiance of the state he should pour those torrents of 
corruption over the land from generation to generation, until time 
should have worn away the dissoluble fragments of the company 
itself. 

If however one individual can doubt the true construction ol so 
plain a clause, he has but to look a few lines further and he will there 
find that " the purchasers and assignees'* of the lottery privilege 
shall be vested for the term they shall so acquire with the same 
rights and privileges as the said corporation. Now can any one 
permit himself to be persuaded that .the same right is another 
and greater right; that after the sale it is bigger than before; that 
like the fallen angels of Milton, when confined to the council 
chamber of the company, this fluctuating franchise shrinks into a 
size to suit convenience, but when it stalks abroad into the wide 
arena of the dealer in millions, it seems 

"In bigness to surpass earth's giant sons." 

The committee cannot torture the act into any other construc- 
tion than that the assignee has no greater right than the company, 



17 

and that as the company had the power to sell a right to raise only 
a specified sum, it is immaterial for what they sell it; it is imma- 
terial how much or how little they receive as the consideration of 
the assignment, and that if the purchaser raises by means of the 
lottery the sum the company had a right to raise had they held 
and exercised the authority themselves they have exhausted their 
privilege, and the commonwealth has redeemed her pledge. 

The committee might perhaps have justly insisted upon a more 
strict construction of the powers conferred upon the company and 
their assignees than that which they have adopted and might have 
urged, that they are chargeable not merely with the nett proceeds 
but with the gross sum raised by the lottery. They might have 
said that "the language of the grant is, not that the sum to be 
brought into the treasury of the company shall not exceed three 
hundred and forty thousand dollars, but that the amount to be rai- 
sed shall not exceed that sum;"* but it is unnecessary to be so 
strict, as the nett proceeds alone of their schemes far exceed the 
sums they were authorised to raise, and they will conclude this 
portion of their argument with remarking, in the language of Chief 
Justice Marshall, in the case cited, that the motive for the restric- 
tion or the amount to be raised, was not to limit the sum to come 
into the treasury of the company, but to limit the extent of gaming 
which the corporation may authorise. 

The committee have expatiated more fully upon this point than 
its plain meaning seemed to require. But as it is the main point, 
and if adopted by the House, leaves no further doubt that the pre- 
sent exercise of the lottery privilege is a gross usurpation; they 
have given it the attention it required. It is admitted that if the 
company are to be debited with the money raised by their assignee, 
that the amount of the profits on the schemes which have been 
drawn exceeds the sums they were authorised " to raise by way of 
lottery," even upon the most extravagant calculation the company 
can adopt whether the grant given by the act of eighteen hundred 
and twenty-one, is cumulative and distinct from that of eighteen 
hundred and eleven or not, 

Let us now proceed to discover what sums the company and 
their assignees have a right to raise by way of lottery, and to as- 
certain whether they have not raised all that they were entitled to 
raise. 

Under the powers conferred upon them by the act of assembly 
of twenty-sixth March, eighteen hundred and twenty-one, the com- 
pany claim to raise by way of lottery the balance of the sum of 
three hundred and forty thousand dollars, which was unraised at 
the date of the act, as well as such sums as may be wanted for 
twenty-five years, to pay the interest of six per cent, upon the new 
stock of four hundred and fifty thousand dollars; making twenty- 
seven thousand dollars per annum from the time of the subscription 

* See the case of Clark- vs. the Corporation of Washington; 12 Wheaton, 53, 



IS 

thereof. No calculations were exhibited to the committee setting 
forth the aggregate amount of these claims, but the committee 
will take the liberty of doing so to show the House that even 
upon the wildest mode of estimate the company have raised more 
than they were entitled to. 

At the time of the passage of the act of eighteen hundred and 
twenty-one, the company had upon their own mode of construc- 
tion, raised one hundred thirty-six thousand and two hundred and 
fifty dollars of the three hundred and forty thousand dollars, 
which the act of eighteen hundred and eleven had authorised 
them to raise. We will take for granted that the tolls having been 
pledged by the company to pay the interest on the loans, are not 
applicable as nett proceeds to the payment of the six per cent, to 
the subscribers in case of the lottery privilege. This admission, 
which is more than the company can ask, will place their estimate of 
the amount they profess to be entitled to raise by way of lottery 
since the act of eighteen hundred and twenty-one, on more favora- 
ble grounds than the case will justify. The amount they claim to 
raise would stand thus on the above suppositions: 
Amount authorised by the act of eighteen hun- 
dred and eleven. 8340,000 
Received from lotteries up to twenty-sixth 
March, eighteen hundred and twenty-one, 136,250 

To be raised at the date of the act ot eighteen hundred 

and twenty-one, 203,750 

Interest claimed on new stock till eighteen hundred and 
forty-six, twenty-five years from eighteen hundred and 
twenty one, 576,533 

Total amount the company claim to raise by way of 
lottery under the act of eighteen hundred and 
twenty-one, 780,283 



The utmost sum therefore the company and their assignees had a 
right to raise upon their own extravagant mode ot estimating, 
would be seven hundred and eighty thousand two hundred and eigh- 
ty-three dollars, a sum the legislature had little thought they were 
authorising them to raise when they passed the act of eighteen 
hundred and twenty-one. 

The committee after showing the untenable grounds of this cal- 
culation, will present to the house the estimate of what the company 
can claim to raise by way of lottery after the act of eighteen hun- 
red and twenty-one. In thejfirst item of their account, the company 
charge themselves with only one hundred and thirty-six thousand, 
two hundred and fifty dollars, as raised by them by way of lottery 
— being the aggregate of what they have received from the several 
contractors since the act of eighteen hundred and eleven. But the 
committee feel assured that the company ought to charge the fund 



19 

they were to raise,with the profits made by their assignees from the 
lotteries, and not merely with the proceeds of the sale of the right. 
This construction which the committee has put upon the clause "to 
raise by way of lottery,'' is consistent with the light in which the 
legislature have considered such privileges granted for similar pur- 
poses to other institutions. It would occupy too much time, which 
has been already consumed beyond the expectation or wish of the 
committee, to detail the nature and extent and mode of exercise of 
the numerous lotteries granted by the commonwealth to other 
corporations. But it seems from the schemes as filed in the office of 
the Secretary ol the Commonwealth, that it was uniformly under- 
stood that the sum to be raised by way of lottery, was the gross 
profit on the scheme prices. 

It is likewise manifest that the company in transferring the 
right of lottery, considered that they were only disposing of what 
they could do themselves and nothing more — that they were selling 
to their assignee to raise what they might have raised themselves, 
and that they, as between them and the commonwealth, were to 
credit the fund to be raised with what was raised by their assignees 
—that if the assignees raised the money, it was the same as re- 
spected the exhaustion of the privilege, as if they had raised it 
themselves. We can give no other construction to the terms in 
their contracts with Allen & M'Intyre ot selling ''the right, privi- 
lege and authority to raise by way of lottery in the State of Penn- 
sylvania, so muck of the sum of money which, by the said act of 
Assembly, it is permitted to the said company to raise by way of 
lottery," &e. These words can receive no other construction than 
that, as soon ai the money authorised to be raised, was raised by 
their assignee, the privilege was exhausted. To show then that 
there were raised more than the one hundred and thirty-six thou- 
sand, two hundred and fifty dollars at the date of the act of twenty 
sixth April, eighteen hundred and twenty-one. of the three hundred 
and forty thousand dollars, and to explain satisfactorily to the house 
their mode of computing the true amount raised under the whole 
privilege, the committee will state the grounds on which their esti- 
mates are made. 

Though the Company most probably are chargeable with the 
gross amount, the committee will take the profits of the lotteries 
drawn under their auspices to be the fifteen per cent, upon the 
scheme prices of the tickets, deducting a reasonable sum for 
expenses. For instance, in the third class of the present year, 
which is now projecting, notwithstanding this procedure, there 
are twenty-four thousand eight hundred and tour tickets, which 
at the scheme price of four dollars each ticket, is ninety-nine 
thousand two hundred and sixteen dollars. This sum is the 
aggregate of all the prizes in that scheme, and when they are 
drawn the broker claims a deduction of fifteen per cent, upon each 
prize. He therefore, upon this scheme, will retain from the whole 
amount of prizes fourteen thousand eight hundred and eighty-two 



26 

dollars and forty cents, being fifteen per cent, upon the scheme 
price of the tickets. This estimate of the profit of the broker, is- 
much freiow his actual receipts from the lottery for the tickets are 
generally sold at an advance of fifteen per cent, or four dollars and 
sixty cents to country dealers, who dispose of them for the most 
part at five dollars, or an advance of twenty-five per cent. The gross 
profit of the lottery is therefore at least the fifteen per cent, upon 
the scheme price of the tickets, which seems to have been a uni- 
form per centage adopted through all the contracts of the Company 
and during their own exercise of the privilege. It is unnecessary to 
go into any statement of the actual profits and the imposition prac- 
tised to increase them, as it is enough for the purpose of the argu- 
ment to take what they will gladly admit to be a favourable esti- 
mate. 

It was alleged however, that this estimate of fifteen per cent, of 
gross profit Would be occasionally too high, as losses were some- 
times sustained by the fraud or failure of agents, and by Mr. M'ln- 
tyre's being often obliged to draw his lotteries when not more than 
three-fifths of the tickets were disposed of. But if the common- 
wealth were to look into such objections, the inquiry would be end- 
less. It is plain that if Mr. M'Intyre sells or entrusts his tickets 
to faithless or incompetent persons, the State don't stand guaran- 
tee for their honesty or capacity to pay. He entrusts them for 
his own benefit and runs the risk for the hope of the profit. And 
again, if he draws his lotteries before his tickets are fully disposed 
of, he does so on the day fixed, because it is to his advantage to be 
punctual, expecting with the tickets skilfully reserved to draw a 
competent portion of the prizes. If deductions for such deficien- 
cies, if any exist, were to be admitted, Mr. M'Intyre would be 
fairly liable to account for prizes drawn by unsold tickets, and the 
Commonwealth would thus become a partner in the very business it 
is her interest to suppress. He is an adventurer in the lottery to 
the extent of the tickets on hand at the time of the drawing; a 
purchaser of the unsold tickets. 

The fifteen per cent, deducted from the prizes being therefore 
the true estimate of the gross profits, our next enquiry is, what 
is a reasonable deduction for expenses of the lotteries? Though 
the committee are satisfied that five per cent, is an ample, and 
more than ample allowance, they are willing in their estimates, to 
make a deduction of that amount for expenses; and to charge only 
ten per cent, upon the scheme prices, as the "nett proceeds of 
the lotteries." They might, from facts and reasoning, into which 
they have no disposition to enter, shew that five per cent, is a 
more than generous deduction, especially since the introduction 
of the new contrivance of chances. But they will merely refer 
to one of Mr. Mclntyre's own contracts, that of eighteen hundred 
and twenty-one, to shew that he then agrees to pay the company 
eleven per cent, considering the four per cent, (the difference be- 
tween the eleven and fifteen,) as sufficient not only to defray the 



21 

expenses, but to remunerate him for all his risk, calculating 
probably on the additional sum for which he would be able to sell 
his tickets over the scheme prices. 

Assuming therefore, that the gross profit of- the lottery is fifteen 
per cent, and that five per cent, is a fair deduction for expenses, 
the committee will proceed to show what was remaining undrawn 
of the three hundred and forty-thousand dollars, at the passage of 
the act of eighteen hundred and twenty-one, and how much has 
been drawn since, so as to satisfy the House that the company and 
their assignees have most widely exceeded their privileges, and 
trespassed upon the patience of the public. 

From the statement number one, furnished by the company, 
pursuant to a resolution of the House, it appears that from eighteen 
hundred and eleven, till eighteen hundred and twenty-one, the 
amount of the scheme prices of the nine classes which had been 
drawn in that period was three million and sixty-eight thousand 
dollars. If we allow ten per cent., which is the fifteen per cent, 
gross profit, deducting five for expenses, we have three hundred 
and six thousand, eight hundred dollars, which deducted from the 
three hundred and forty-thousand dollars, leaves thirty-three thou- 
sand, two hundred dollars as the balance of the old sum unraised, 
when the act of eighteen hundred and twenty-one was passed jwhich 
with the sum of seventy thousand, five hundred and one dollars and 
fifty-seven cents, then in the treasury of the company, admitted to 
be received from the lottery grants, would make the sum of one 
hundred and three thousand, seven hundred and one dollars and fif- 
ty seven cents, applicable by the directions of the acts of eighteen 
hundred and nineteen and eighteen hundred and twenty-one, to 
the payment of the six per cent, to the new subscribers. We say 
new subscribers, for the act of eighteen hundred and twenty-one 
suspends the pledge of the avails of the lottery to pay the old 
stockholders, until the completion of the canal; which after all that 
was said of it in eighteen hundred and twenty-seven, can only be 
considered as finally achieved during the last year. 

Any claim of six per cent, upon the unforfeited shares, from the 
proceeds of the lottery, is inadmissible. The old lottery fund 
was, it is true, by the act of eighteen hundred and nineteen, pledg- 
ed to pay as well the old as the new subscribers, whenever the 
new subscription should be made, but that pledge could not attach 
until after the act of eighteen hundred and twenty-one, as the new 
subscription only took place then, and by that act, the application 
of the old lottery grant, to pay six per cent, to the old stockhold- 
ers, was expressly suspended until after the canal should be com- 
pleted; and as, on the construction the committee have adopted, 
it was applicable by the act of eighteen hundred and twenty-one 
to pay the new subscribers, it was exhausted before it could be ap- 
plied to pay the unforfeited shares by the payment of the six per 
cent, to the new subscription. To say that any portion of the 
funds to be raised under the act of eighteen hundred and twenty 



22 

one, was to be applied to the old stock, is agaiifst its positive 
words. 

We come now to another item in the estimate of the company; 
the right to raise, under the act of eighteen hundred and twenty 
one, the sum of twenty-seven thousand dollars per annum, to pay 
the new subscribers six per cent on the four hundred and fifty 
thousand dollars. 

But as the committee are decidedly of opinion, that it was not 
intended to give the company a distinct grant, but that the pro- 
ceeds of the old lottery, as far as they would go, were first to be 
applied to pay the six per cent, to the new subscribers, and ex- 
hausted in such payments, before the power to continue the lotte- 
ries beyond the three hundred and forty thousand dollars should 
be resorted to, they will proceed to give their reasons for this con- 
struction. The proper understanding of the privileges conferred 
by this act of eighteen hundred and twenty-one, is of peculiar 
importance, as the company will have exceeded their authority, 
even upon their own construction, (that the money received by them 
from, the proceeds of the sales is the money raised by way of lot- 
tery,) if there are not two distinct powers of raising money re- 
cognized in it. 

The language of the first part of the section is, " that if the 
proceeds of the lottery granted to the Union Canal company, 
together with the tolls which may be collected," &c. shall not, 
for twenty five years, yield six per cent, to the new subscribers, 
&c. What lottery is here alluded to as "granted?" To one that 
had been already granted, or as thereby granted? The lottery that 
had been granted was to raise the balance of the three hundred 
and forty thousand dollars. The act of eighteen hundred and 
twenty-one speaks not of a new grant just then about to be con- 
ferred, but uses the past participle as designating something done 
before. As the clause quoted could not have reference to a lottery 
described in any prior part of the act itself, it must have alluded 
to one granted either by some former act, or some subsequent 
clause of the same act. The use of the past tense here, must ne- 
cessarily refer to some prior act, there being no phrase qualifying 
its usual import. If it had allusion to a new grant, to any other 
than the old lottery, the language *« hereby granted" would have 
been used, or the words " hereafter granted" or " intended to be 
granted." 

The committee after the most patient examination of the act, are 
decidedly of opinion that the true meaning of it is, " That if the 
proceeds of the lottery which had been heretofore granted, will not 
with the aid of the tolls pay six per cent, on the four hundred and 
fifty thousand dollars, which may be subscribed by new subscribers, 
agreeably to the act of eighteen hundred and nineteen, any defi- 
ciency which may arise in any year for twenty five years shall be 
paid out of the public treasury, and if the proceeds of the old lotte- 
ry should not be sufficient to aid the tolls throughout that period to 



23 

pay the said six per cent, and also six per cent, upon the old stock, 
after the canal is completed you are by this act authorised to con- 
tinue to raise, by way of lottery, " what may be wanted for the 
purpose of paying six per cent, to the holders of said stock " during 
the twenty-five years. But if the tolls in any one year should be 
adequate to the payment of six per cent, to the stockholders, you 
must cease to draw lotteries during such year, except as authorised 
by the act of eighteen hundred and eleven and seventeen hundred 
and ninety-five, under which you may proceed as speedily as you 
please 1o draw any balance, be the tolls ever so productive — and if 
there should be any excess overdrawn beyond what may be want- 
ed as aforesaid, during that year, to pay with the tolls the six per 
cent, it must be applied to aid the tolls the following year, and 
thereby lessen the necessity of drawing, in any one year, more 
than "may be wanted." Thus the act of eighteen hundred and 
twenty one, though it manifestly designs to extend this pernicious 
system of finance no further than was absolutely necessary to pro- 
tect the public treasury; yet it does not mean to interfere with the 
privilege of the company to raise, or to dispose of the right to 
raise the balance of the three hundred and forty thousand dollars, 
under any circumstances, and as soon as they may please. 

Upon a careful consideration of the act, this construction seems 
to the committee too manifest to be questioned. The provisions of 
this law were much discussed, and as the view which the commit- 
tee have taken of it will be conclusive of the right of the company 
upon their own principles of estimating the sums which have been 
raised, the committee take the liberty of pressing some further 
arguments upon the indulgence of the House, in aid of their con- 
clusions. 

Thus, when the section alludes, as already stated, to the old 
privilege, it uses the phrase f if the proceeds of the lottery grant- 
ed," meaning that had been granted; but when it grants the power 
"to continue" the lottery privilege beyond the balance of the three 
hundred and forty thousand dollars, it uses the terms " hereby 
authorised." When the act gives the additional privilege of con- 
tinuing the lottery powers, it says: M The president and managers 
of the said company shall be, and they are hereby authorised to 
continue, during the said term of twenty-five years, to raise, by 
way of lottery, any sums that may be ivanted, for the purpose of 
paying to the holders of said stock the six percent, as aforesaid." 

This is the first clause alluding to any grant given by this act, 
and if "the lottery" mentioned in the first part of the section as 
"granted," was not the old lottery, but a new and distinct grant, 
to raise six per cent, on the new subscription, if this power to 
"continue, &c." is the same as "the lottery granted," why again 
repeat the authority to exercise it. If there had been conferred 
a new lottery grant whose proceeds, with the tolls, were at once 
applicable to the payment of the six per cent., why, for the first 
time here, designate its limits and direct anew the application of 



24 

its proceeds. But suppose this clause should be struck out of the 
act, can it be pretended that a new power was conferred by the 
clause preceding? It is too manifest that if the company rested 
on the first part of the section for their power to raise more than 
the balance of the three hundred and forty thousand dollars, they 
would have long ago resorted to the public treasury to releive 
the "disability" of the tolls and the lottery proceeds to make the 
six per cent. It is the clause above quoted, and that only, which 
gives any additional privilege, refers to any new grant. We must 
take the enactment then altogether, and if we do so, we find the 
limits of the new privilege specifically defined, and only to be 
resorted to "for sums that maybe wanted." There are bounds 
put to this continuing right that are not set to the old one. This 
power of continuance is to be used only under a certain state of 
things, the first one under any. 

By this clause the company are "authorised to continue to raise 
by way of lottery," &c. Now can the right ot continuance be 
•construed to mean something new and distinct from what it was a 
•continuance of? Does not continue mean to pursue something 
commenced? A man continues his walk or his habits, his busi- 
ness or his dissipation, and in doing so he goes on in the old way. 
He is but proceeding with what he had commenced. The power 
'to continue don't mean that the company should begin afresh, but 
that they might proceed with and extend what they had been 
drudging at for five and twenty years. 

For what purpose were these sums to be raised by the contin- 
uance of the lottery, ' 'wanted"? Was it to pay the interest on 
the stock at all events, under every circumstance? No; but "for 
the purpose of paying to the holders of said stock the six per cent. 
as aforesaid." Paying six per cent. t; as aforesaid," means in the 
manner before specified. How then had the six per cent, been 
•directed in the previous part of the section to be paid? out of 
what fund! Why from "the proceeds of the lottery granted and 
the tolls which may be collected." Then surely as long as th-e 
lottery proceeds or the tolls were competent to pay the six per 
cent, no sum could "be wanted" from the additional source— 
there would be no need of the exercise of the continuing power. 
There were two contingencies under which this new power could 
alone be brought into action; the failure of the lottery and the 
failure of the tolls to pay the six per cent. Now those who con- 
strue the act of eighteen hundred and twenty-one, as conferring 
a new and distinct grant, wholly applicable to the payment of the six 
per cent., and unconnected with the old one, must confine them- 
selves to one contingency alone — that of the failure of the tolls: 
for if it were not the proceeds of the old lottery that was to aid 
jjlhe tolls, the new lottery would be always in requisition, whenever 
there was a deficiency of tolls to pay the six per cent. But the 
fust part of the act expressly says, that the six per cent, to new 
subscribers was payable primarily out of "the proceeds of the 



25 

lottery and the tolls which may be collected," and the latter 

clause says that no new privilege is conferred, except "to raise 
any sums that may be wanted to pay the six per cent, as afore- 
said." So there must have been two wants before the continuing 
power could be used — that of the deficiency of the lottery pro- 
ceeds, and the deficiency of the tolls co'iected. When in the 
prior portion of the section, "the proceeds of the lottery 5 ' are re- 
ferred to as applicable to the payment of the six per cent, what 
lottery is designated? If it were the lottery granted by the act 
of eighteen hundred and twenty one, as is contended for by the 
company, then it would have been enough to have referred to the 
disability of the tolls alone to produce the circumstance under 
which the power of continuing to raise money by lottery was exer- 
cisable. It would be absurd to say if the proceeds of the lottery 
granted by this act, or the tolls collected should beinsuflicientto pay 
the six per cent., that then what sums should be wanted should be 
continued to be raised; when the very clause giving the power to 
continue to raise the sums wanted, was only to be exercised at all 
when the contingencies of such proceeds being insufficient should 
arise. But should v/e still hesitate to decide whether the proceeds 
of 4, the lottery,*' alluded to in the first part of the act as auxiliary to 
the tolls in the payment of the six per cent, we need raise our eye 
but a few lines abuve the clause which has been quoted at length, 
to satisfy ourselves that it is the proceeds of the lottery of eighteen 
hundred and eleven. Can we entertain any doubt that the pro- 
ceeds of the old lottery must come in aid of the tolls when we con- 
nect what has been said with the irrefragable evidence of these pri- 
or words of the act — '* And in order to avoid as far as possible all 
disability to pay such interest, so muc'i of the third section of the 
act aforesaid, as pledges any portion of the monies or nett profits 
of the lottery aforesaid, to the payment of the holders of shares not 
forfeited in the late Delaware and Schuylkill and Schuylkill and 
Susquehanna canal companies, be, and the same is hereby suspen- 
ded until the canal shall be completed, &c." The " lottery afore- 
said" is of course " the lottery" spoken of in the first part of the 
section, there being no other to which the word " aforesaid" would 
apply. The lottery, the proceeds of which were to aid the tolls in 
payment of the six per cent, to the new subscribers, is the only one 
referred to by tile word '"aforesaid." It is then "the lottery 
granted," which is pledged by "the act aforesaid." When we 
come to examine what act "aforesaid" it is, that pledges the avails 
and nett proceeds of " the lottery aforesaid" to the unforfeited 
shares, we find the only act alluded to by the" phrase "the act 
aforesaid," to be the act of eighteen hundred and nineteen, cited 
in the first few lines of the section. That of eighteen hundred an 
nineteen was the act which pledged the avails and proceeds of t 
lottery to pay six per cent, to the old stockholders. Now when 
this act of eighteen hundred ami twenty-one uses the terms "the 
lottery granted." as the lottery, ihe proceeds of which were to aid 
' lir ? tolis to pay 'he six per cent, and afterwards to designate that 

4 



26 

lottery, points to it as the lottery which had been piedged by an 
act passed two years before, can it be possible that it is a new lot- 
tery grant first conferred by, and owing its existence to the very 
act which speaks of it as having existed two years, aye, six and 
twenty years before its passage? 

If then " the lottery" in the first part of the first section of the 
act of eighteen hundred and twenty-one is the lottery, the proceeds 
of which were pledged by the third section of the act of eighteen 
hundred and nineteen, it is as clear as the noon day sun, that it is 
the proceeds of the old lottery to raise the balance of the three 
hundred and forty thousand dollars that are to be first appropria- 
ted under the provisions of the act of eighteen hundred and twen- 
ty-one, to aid the tolls in paying the interest on the new subscrip- 
tion, before resort can be had to the power to continue the lotte- 
ries, if any sums should be wanted to aid the tolls and the pro- 
ceeds of the lottery granted in paying such six per cent. 

To get clear of this obvious direction of the act, it would do to 
say that the lottery designated under the phrase " the lottery gran- 
ted," in the act of eighteen hundred and twenty one, is not the 
lottery authorised by the acts of eighteen hundred and eleven and 
seventeen hundred and ninety-five, because such construction would 
impair the right of the free disposal of the bounty and would give 
a new direction of the former pledge of its proceeds, when it is so 
plainly pointed out as not to be misunderstood. We should re- 
collect that the pledge of the proceeds of the lottery to the payment 
of six per cent, to the stockholders, by the third section of the act 
of eighteen hundred and nineteen, was a benefit the enjoyment of 
which they might forego; a bounty which for their own advantage 
they could appropriate to the payment of interest upon loans or 
any other legitimate object. The operation was but taking the 
money out of their six per cent pocket to put it into the pocket to 
which their loan holders would make application for their interest. 
But in fact this pledge was only partially suspended— only as re- 
spects the old share holders, and left mjzdl force as relates to the 
neio subscribers. 

But the committee respectfully to those who may differ from 
them, intimate that the pledge to the old share holders never took 
effect till after the act of eighteen hundred and twenty-one; as it 
was given on the condition that the new stock of twenty-five hun- 
dred should be first subscribed, which in fact was not done when 
that act passed. The act of eighteen hundred and twenty one 
suspended not the pledge, for that had not attached, but w 'so much 
of the third section of the act of eighteen hundred and nineteen, as 
pledges any portion of the avails or nett proceeds of the lottery," 
tto pay si* per cent, to the old stock till after the completion of the 
canal. 

The act of eighteen hundred and twenty-one seems to have been 
intended as a recognition and re-enactment of the old lottery pri- 
vilege, preserving the pledge of its proceeds as directed by the act 
of eighteen hundred and nineteen, except the temporary suspension 



27 

affecting the old stockholders and giving as already stated, a new 
power to continue to raise from the sums as may be necessary to 
meet the purposes set forth. That the act of eighteen hundred 
and twenty-one intended to re enact and sanction the drawing of 
the balance of the three hundred and forty thousand dollars, as the 
act of eighteen hundred and eleven had the balance of the four 
hundred thousand dollars, and to embrace the old right and the 
power of continuance, both within its provisions; the committee 
conceive to be strongly implied by the terms of the proviso. This 
part of the act is in these words : " Provided, That whenever the 
nett proceeds of the tolls shall amount to the said six per cent., 
the privilege hereby granted of raising money by lottery, shall 
during such time be suspended, except so far as is authorised by 
existing laivs. " 

Now if the privilege granted by this act was a distinct and new 
power, intended for, and solely applicable to the payment of the 
interest upon the six per cent, to the new subscribers, it is a pri- 
vilege conferred by this act above, and not by any former laws. 
Why then except from the operation of the proviso that portion of 
the privilege which is authorised by existing laws. No portion of 
this privilege to raise money exclusively to pay interest to new 
subscribers out of a lottery fund distinct from the old one, 
was authorised by any other act than the one containing the pro- 
viso. Why then, when restricting the exercise of a power con- 
ferred by the act of eighteen hundred and twenty-one alone, 
except from the operation of the restriction; that portion of the 
power which was authorised by other laws when no other law con- 
ferred any portion of the power. The privilege therefore which is 
designated in the phrase "the privilege hereby granted of raising 
money," is not merely a new and distinct grant; but the old grant 
recognized and re-sanctioned by this act, and the further power 
of continuing the lottery as just given above. If we adopt any 
other construction we render the exception absurd. But by this 
one we render plain the meaning of the terms "except so tar as is 
authorssed by existing laws," as having reference to the old 
privilege which it was permitted to pursue, whether the tolls co- 
vered the six per cent, or not. The phrase "existing laws," is 
equivalent to prior acts, and refers to those of eighteen hundred 
and eleven and seventeen hundred and ninety-five. If the tolls 
were adequate to the payment of the six per cent, the new power 
was to cease its operations, but the old power was permitted to 
operate as formerly, without restriction short of raising the whole 
amount; but its proceeds "in no event" were to be divided over 
six per cent, on the stock of the company, but the excess was to 
be reserved to meet any deficiency that might occur in the tolls 
of the following year. 

There is another strong argument in favor of this construction 
of the act, drawn from the suspension of the pledge of the lottery 
proceeds to the old subscribers. Is it not too manifest to be mis 
taken, that if it were not the proceeds of the old lottery, th 



2b 

with the aid of the tolls, were to be applied to pay the interest ok 
the new subscription, under the provisions of the act of eighteen 
hundred and twenty-one, that there would be no propriety in sus- 
pending the right of the unforfeited shares to receive the proceeds 
of it, so as to enable them to pay the new subscribers? The act 
gays: et In order to avoid, as far as possible, all disability to pay 
such interest, (that is, the interest on the new stock) so much of 
the act of eighteen hundred and nineteen, as pledges any portion 
of the avails or nett proceed:: of the lottery to the payment of an 
annual interest to the holders of shares not forfeited in the old 
companies, be and the same is hereby suspended." Now if " the 
lottery granted" by the act of eighteen hundred and twenty-one, 
was a new and distinct grant, the proceeds ot which were alone 
applicable to the payment of the six per cent, its proceeds surely 
had never been pledged. Why would you suspend an application 
of its proceeds to the old stock, when, if the lottery power owed 
its origin to the act of eighteen hundred and twenty one, its 
proceeds could not have been pledged by the act of eighteen 
hundred and nineteen? This would be liberating it from 
a burthen to which it never had been subject; it would be re- 
lieving its proceeds from an application to which they had never 
been bound. If "the lottery" mentioned in the first part of the 
first section of the act of eighteen hundred and twenty-one, the 
proceeds of which were applicable to the payment of the six per 
cent, were not the old lottery of eighteen hundred and eleven, 
there was no necessity of discharging it from such application, to 
enable it, the better, to pay the new subscribers. If it were a new 
distinct lottery, indebted for its existence to the act of eighteen 
hundred and twenty-one alone, how could its proceeds have been 
pledged by an act passed two years before. 

The argument, that if the act of eighteen hundred and twenty 
one, intended to apply t^Q proceeds of the old lottery to the pay- 
ment of the sis per cent, to the new subscribers, it were very easy 
for it to say so; and that the omission to do so expressly is evi- 
dence of its not being intended, falls to the ground, when we find 
the act so evidently makes the appropriation. 

The fact of the company's selling the privilege conferred by the 
act of eighteen hundred and twenty-one, shows that they viewed 
it as a branch of the old concern, and that they considered it ne- 
cessary to preserve the connexion with the act of eighteen hun- 
dred and eleven, for the purpose of maintaining the power to sell, 
which is not alluded to in the act of eighteen hundred and twenty 
one. If the privilege granted in the act of eighteen hundred and 
twenty-one is distinct and cumulative, having no connexion with 
that of eighteen hundred and eleven, there might be very strong 
ground for doubting the power to assign it; but as the company, by 
their contracts of eighteen hundred and twenty-one and eighteen 
hundred and twenty-four, acknowledge their only authority as de- 
rived from the act of eighteen hundred and eleven, they necessa- 
rily are clear of any difficulty as to the ability of disposing of the 



B9 

additional continuing power. They have, in the contracts given, 
a contemporaneous construction to the lottery privilege, consistent 
with the true meaning of the act of eighteen hundred and twenty 
one. 

There is another view of the matter which strengthens the com- 
mittee in their construction. When the act of eighteen hundred 
and twenty-one was about to pass, the friends of the canal, ever 
sanguine of their success, and not disheartened by the obstacles 
they continually encountered, confidently anticipated an ample 
remuneration for all their toil. High hopes of profit had, from the 
earliest period of their project, cheered them in their efforts. To 
be satisfied of this, we need only appeal to the acts of Assembly 
that gave them existence, and extended their privileges. The act 
of seventeen hundred and ninety-one and seventeen hundred and 
ninety-two, talk of a profit or 'twenty-five per cent. — that of 
eighteen hundred and seven of a surplus fund; the act of eighteen 
hundred and eleven, even of raising a fund out of an excess of 
dividends over twenty-five per cent, to buy out the canal and make 
it free; and the act of eighteen hundred and nineteen of reducing 
the dividends to twelve per cent.; and it was confidently predicted 
that five hundred thousand dollars, the amount to be subscribed 
by individuals and the state, would finish the whole work. But 
dams and feeders, steam engines and tunnels, were to be encoun- 
tered and provided, and instead of the new subscription answer- 
ing the purpose, the company have been obliged to involve them- 
selves in loans, to the amount of one million, four hundred and 
thirty thousand dollars. How easy was it, however, under the flat- 
tering anticipations of eighteen hundred and twenty-one, for the 
company to say to the legislature, " only give us the pledge of the 
state for twenty-five years, to induce a new subscription, and a 
further continuance of the privilege, and we will soon relieve the 
commonwealth from her engagement, by the proceeds of the lot- 
teries and the tolls." They would say that (i the proceeds of the 
lottery fund alone, will nearly pay the interest till the canal is 
completed, when the tolls will surely be adequate to such pur- 
pose. We expect yet, from the proceeds of the lottery, nearly forty 
thousand dollars, which, with the proceeds from that fund on hand, 
amounting to seventy thousand five hundred and one dollars and 
fifty-seven cents, now invested in good stock, will, with the in- 
terest thereon, certainly keep the state clear^for nearly four years; 
and by that time we will be in the receipt of tolls, which will be 
daily increasing. The state, perhaps, may not be called upon for 
a dollar, especially it we have the power of continuing the lottery 
privilege when it may become necessary; and we will agree to 
draw each year no more than is necessary to keep down the in- 
terest." The legislature granted their request, with all the re- 
strictions upon the spirit of gaming, consistent with the safety of 
the public treasury, which had, under the same act, appropriated 
to the aid of the company fifty thousand dollars, by the subscrip 
tion of two hundied and fifty shares. 



30 

U the preceding reasoning on the construction of the act of eigh- 
teen hundred and twenty-one is sound, the company could not, in 
making their estimates, claim to draw any lotteries under the con- 
tinuing power until the old lottery should be exhausted, and the 
tolls are inadequate to the payment of the six per cent, on the new 
subscription. The company having long ago exhausted the balance 
of the three hundred and forty thousand dollars, have no similar 
privileges except the power to continue the lottery, provided the 
tolls will not pay the six per cent, on the new subscription of four 
hundred and fifty thousand dollars. 

The company however, in opposition to the plain meaning of the 
act of eighteen hundred and twenty-one, say, that no portion of ei- 
ther the tolls or the old lottery is applicable to the payment of the 
interest on the new stock, the proceeds of both being mortgaged to 
loan holders, the interest due whom amounts to eighty-five thou- 
sand eight hundred dollars per annum. And they make their esti- 
mates in this manner: 
Balance of the lottery at date of act of eighteen hundred 

and eleven, 8340,000 

Raised up to the date of the act of eighteen hundred and 

twenty-one, 136,250 



Balance of old lottery, 8203,750 

This sum of two hundred and three thousand seven hundred and 
fifty dollars of the old lottery, they say, is yet to raise; all the mo- 
ney they have raised since the act of eighteen hundred and twenty 
one being, they alledge, procured under the power conferred by 
that act has been exclusively applied to pay the interest to the new 
subscribers. 

Since the act of eighteen hundred and twenty-one, 
from sixteenth January, eighteen hundred and 
twenty-two, till fourth January, eighteen hundred 
and thirty-two, they sav they have raised in pur- 
suance of that act . 8269,210 40 
Of which they have applied to pay interest on the 

new subscription, 189,532 94 



Leaving over drawn and to be preserved to supply 
any deficiency of the tolls to pay the interest on 
the new subscriptions, 879,677 46 

Now it does seem to the committee upon this very mode of com- 
putation the company are transgressing their privileges, in contin- 
uing the exercise of the new lottery grant. Here they have, un- 
der the new lottery power, nearly as much accumulated from the 
proceeds of the sale of it as will pay three years interest of the 
new subscription, and yet they persist in their lotteries under this 
act, although it enjoins " that it shall in no event be lawful to di 



31 

vide any sum arising from said lottery over six per cent, upon the 
stock of said company, it being the intent and meaning of this act 
that all such excess shall be reserved to meet any deficiency there- 
of that may occur at any time in the tolls." Now, if this surplus 
is to be reserved to meet the deficiency in the tolls, why not apply 
it and so save the necessity ot drawing lotteries for three years. 

Rut the proper mode of making the estimate by the company, 
(taking the old lottery as applicable to the payment of the six per 
cent, on the new subscription.) would be as follows: 
Ralance of old lottery to be raised at the date of the 

act of eighteen hundred and eleven, S203,750 00 

Raised since, up to fourth January, eighteen hundred 

and thirty-two, 269,210 40 

Leaving against the company over drawn of $61,459 40 

It is manifest therefore, on the company's own position (that the 
proceeds of the sale of the lottery is the money they have raised 
from them.) they have overdrawn their privilege sixty five thou- 
sand four hundred and fifty-nine dollars and sixty cents, even 
without embracing the tolls, though expressly directed to go in 
aid of the payment of the interest. But the company assume the 
untenable position that neither the proceeds of the old lottery nor 
the tolls are applicable to the payment of the six per cent, to new 
subscribers. If these positions are'wrong, the company, on their 
own mode of computation, have entirely exhausted their lottery 
privileges; and that they are wrong the committee entertain but 
little doubt. They think that as to the first, they have clearly es- 
tablished the point, that it is the proceeds of the old lottery, which 
by the act of eighteen hundred and twenty-one, were to go in aid 
of the tolls to pay the six per cent, on the new subscription. The 
company however, say, that the proceeds of that lottery were 
pledged by the act of eighteen hundred and nineteen, to the pay- 
ment of six per cent to the new subscribers, and being given as a 
bounty, have been legally appropriated by the company to pay the 
interest on their loans. The power of doing so the committee do 
not desire to dispute, but they are decidedly of opinion, that if 
the stockholders, instead of applying its proceeds to the payment 
of the six percent., choose to relieve themselves by paying their 
own debts with it, they have no right to call on the public treasury 
to indemnify them For a disability of their own creation. The 
old lottery avails were, by the act of eighteen hundred and 
twenty-one, to pay the six per cent, and have been exhausted in 
such payment, and a surplus from the whole lottery fund remains 
in the hands of the company. 

Have the company a right then to go on and draw lotteries un- 
der the continuing power conferred by the act of eighteen hun- 
dred and twenty-one. The committee say not, for two reasons: 
First, the company could only u*e that power when the lottery 
proceeds failed to pay the six par cent: — Second, when the tolls 



32 

ivere inadequate to do so. The first disability does not now ex- 
ist, for there is on hand of the lottery proceeds as much as would 
pay the interest on the six per cent, for more than two years. 

The tolls of the company are so far from being inadequate to 
the payment of the six per cent, on the new subscription, that 
even this year, ending first November, eighteen hundred and thir- 
ty-onej their gross proceeds are now more than double the amount 
of the six per cent., the first year the canal may be said to be en- 
tirely complete, and to need no further repairs than those that are 
ordinary. The tolls of the year ending first November, eighteen 
hundred and thirty, amounted to thirty-five thousand, one hundred 
and thirty-three dollars and eighty-two cents, and this year to 
fifty-nine thousand, one hundred and fifty-three dollars, nearly 
double the amount required to save the state from the liability of 
her guarantee. And yet the Union Canal company can stand up and 
alledge that they have a right to continue the drawing of exten- 
sive lotteries,, in the face of these proceedings of the legislature. 

But it is alledged by the company that these tolls are pledged to 
the loan holders, who have lent their money on the faith ot this 
pledge, and that they cannot be called nett proceeds of tolls, and 
applicable to the six per cent, to the new subscribers whilst they 
are applied to the payment of the interest on the loans of the 
company. The committee do not undertake to dispute the pro- 
priety and power of such application; it is not necessary for them 
to do so. For if the tolls are pledged to pay the stockholders by 
the act of eighteen hundred and nineteen, if they belong to them, 
they may mortgage them as they can: as the company is bound for 
the payment of the interest to their loan holders they may as well 
pay it with the tolls as from their pockets. But the committee 
are decidedly of opinion that they must relinquish the right to call 
On the guarantee of the state pro tanto. If they take the tolls to 
pay the interest on the loans, instead of applying them to pay the 
six per cent, to the new subscribers, as directed by the act of 
eighteen hundred and twenty-one, they cannot call Upon the state 
to redeem her guarantee, as it is expressly confined to the cases in 
which the tolls are not adequate to that purpose. The insufficien- 
cy of the tolls collected is made a condition precedent to /the at- 
taching of the liability of the public treasury. Every year there- 
fore that the nett proceeds of the tolls are competent to thepayment 
of the six per cent., the state is no further bound. It was cer- 
tainly not Contemplated, at the time of the passage of the act of 
of eighteen hundred and twenty-one, that the company would 
be necessitated to borrow money; at least to any great extent. 
The report of the commissioners of internal improvement that year, 
is decidedly of the opinion that the five hundred thousand dollars 
to be subscribed by subscribers and by the state, would be adequate 
or nearly so to the construction of the works. As the necessity 
of borrowing money and appropriating their tolls to the payment of 
the interest on the debt, was not in the view of the legislature at 
that time>the guarantee of the state was cheerfully accepted upon the 



33 

positive condition, that if the tolls "which may be collected shall 
not yield a 6um equal to an annual interest of six per cent. " upon 
four hundred and fifty thousand dollars to be subscribed by new 
subscribers, then the deficiency is to be made up by warrants drawn 
by the Governor on the treasury. Certainly then whenever the 
"tolls which may be collected," are equal to an interest on the 
instalments paid up under the new subscription, there is no defi- 
ciency; there is not that state of things to justify a call by the com- 
pany on the funds of the state. They have only a right to call on 
the Governor to draw his warrants to supply what may be wanted. 
If then the tolls are adequate to such purpose, how can there be a 
deficiency to justify the call on the treasury. It the stockholders 
choose to apply the tolls toother purposes, they forego the pay- 
ment to themselves — can any one insist with the least plausibility 
that the appropriation of tolls to other purposes by the company 
herself, lessens their amount or changes the state of things under 
which the guarantee of the state comes into operation. 

The House must feel satisfied therefore, that as long as the tolls 
of the Union Canal company, which by the last report amounted 
to fifty nine thousand one hundred and fifty -three dollars, and will 
certainly increase from year to year; will cover the twenty-seven 
thousand dollars, (the six per cent, to the new subscribers) the 
state has nothing to fear respecting her guarantee. 

The committee will leave this point, which they conceive to be 
as plain as any of the others they have endeavoured to establish, 
and proceed to show that the company have exhausted their lottery- 
privileges even upon the most extravagant mode of estimating their 
amount their ingenuity can suggest. Giving the company more 
than they can ask; that they have two distinct lottery grants, the 
last of which is alone applicable to the payment of the six per cent, 
and giving them the right to take away the fund which the state 
has placed between her and the operation of her pledge, and al- 
lowing that this right of drawing lotteries is to be practised for the 
whole period of the twenty -five years, and afterwards to raise the 
two hundred and three thousand seven hundred and fifty dollars of 
the old grant; they have even upon all these presumptions "raised 
by way of lottery,'' on the principles which the committee hope 
they have satisfactorily established, more money than they were 
entitled to raise four times over. 

Granting for argument sake then to the company, that they were 
entitled by the acts of eighteen hundred and eleven and eighteen 
hundred and twenty-one, to raise the balance of the old lottery, 
which they claim to do, of two hundred and three thousand seven 
hundred and fifty dollars; and that they have also a right to raise 
the interest on the new stock, as it was paid in for the whole twen- 
ty-five years, amounting to five hundred seventy six thousand five 
hundred and thirty-three dollars; making an aggregate of seven 

hundred eighty thousand two hundred and eighty three dollars 

yet upon this extravagant estimate they have extended their privi- 
leges beyond conception. 



34 

The following list of schemes in each year, as furnished by the 
company, in pursuance of a resolution of the House, shows the 
amount of the lotteries drawn in each year, from the passage of the 
act of eighteen hundred and eleven till the beginning of the pre- 
sent year; 



Fear. Amount of Schemes, 


Fear. 


Amount of Schemes, 


1812 g350,000 


1822 


8178,295 


1814 400,000 


1823 


132,976 


1815 400,000 


1824 


318,300 


1817 555,000 


1825 


1,209,640 


1818 528,000 


1826 


1,127,875 


1819 200,000 


1827 


1,210,172 


1820 475,00a 


1828 


1,308,763 


1821 160,000 


1829 


2,705,748 


—- — 


1830 


4,772,882 


Raised 'till the 


1831 


5,216,240 


act of 1821, 83,068,000 







Raised since the 
act of 1821, 18,180,891 
3,068,000 



21,248,891 



Ten per cent, on the above, is 82,124,889 

It appears from the above list of lottery schemes that they have 
amounted, from the date of the act of eighteen hundred and eleven 
until that of eighteen hundred and twenty-one, to three million 
sixty-eight thousand dollars, and from the passage of the latter act 
till the beginning of the present year to eighteen million one hun- 
dred eighty thousand one hundred and ninety-one dollars, making 
an aggregate of twenty-one million two hundred forty eight thou- 
sand eight hundred and ninety-one dollars; ten per cent, upon 
which will shew that the company has raised by way ot lottery, 
through the medium of their assignees, a "nett profit" of two mil- 
lion one hundred twenty-four thousand eight hundred and eighty- 
nine dollars. It we take from this amount raised, the sum of 
seven hundred eighty thousand two hundred and eighty-three dol- 
lars, which they pretend to claim a power to raise, we find they 
have exceeded their own estimate by one million three hundred 
forty-four thousand six hundred and six dollars. 

There is one more light in which the committee ask the indul- 
gence of the House to place this subject and they are done. 

The Union Canal Company say they have received, on their 
own mode of estimating the proceeds of the lotteries. 
From the act of eighteen hundred and eleven till that 

of eighteen hundred and twenty-one, 81S4,250 

And since the latter act to the present year, 269,210 

Making an aggregate of 405,460 

From which deduct what they were entitled to raise, 340,000 

Leaves more than they were entitled to raise under 

the old act 65,460 



35 



The above sum of sixty-five thousand four hundred and sixty 
dollars over what they were entitled to raise by the act of eigh- 
teen hundred ancl eleven has been raised under the continuing 
power given by the act of eighteen hundred and twenty-one up to 
this time, when the tolls are more than doubly sufficient to releive 
the state from all responsibility. 

If this monstrous system, as now pursued, will be permitted to 
continue — if it must be prosecuted till eighteen hundred and 
forty-six, the end of the twenty-five years, to the same extent 
they have been the last year, before that distant day arrives lotte- 
ries to the amount of perhaps seventy million of dollars will have 
tarnished the moral purity of Pennsylvania. If we add to this 
prodigious sum the amount already drawn under the auspices of 
the company since the act of eighteen hundred and eleven, we will 
have an aggregate of at least eighty-eight million one hundred 
eighty thousand eight hundred and ninety-one dollars. 

Your committee submit it to the House, to any human being of 
the most towering credulity to say if it can be credited for one 
moment that the legislature could have supposed they were entail- 
ing on themselves and their posterity so galling a burthen without 
any expectation of redress. But they hope they will be permitted 
to say that the usurpations of this corporation will stand as a lofty 
beacon to warn us of the danger of trusting to any system of fi- 
nance that is based upon an immoral foundation; and they confi- 
dently hope that when this blot is wiped away, the legislative 
power of the state will never again be allured to tarnish her fair 
fame to protect her treasury; but that that "VIRTUE'' which 
shines conspicuous upon the escutcheon of our commonwealth will 
remain as unsullied as her "LIBERTY and INDEPENDENCE." 



FOR, THE ENTIRE ABOLITION OF LOTTERIES. 

Whereas, by certain acts of the General Assembly of this com- 
monwealth, the right to raise by way of lottery certain sums ot mo- 
ney, was granted to the Union Canal company of Pennsylvania: 
And whereas, it appears to the legislature that the said right has 
been fully exercised and exhausted, and if it has not, that it is 
expedient to terminate the further exercise of it, and to pay to the 
said company such sum of money as remains unraised: And 
whereas, all other rights to raise money by lottery, heretofore 
granted by the legislature, have either been exercised and ex- 
hausted, or have been abandoned; and it being the intention of 
the legislature to put an entire stop to the evils arising from lot- 
tenes, and the sale of iotterv tickets: 



36 

Section 1. Be it enacted by the Senate and House of Representa- 
tives of the Commonwealth of Pennsylvania in General Assembly 
met, and it is hereby enacted by the authority of the same. That from 
and after the day of next, all and every lottery and lot- 

teries, and device and devices, in the nature of lotteries, shall be 
utterly and entirely abolished; and are hereby declared to be 
thenceforth unauthorised and unlawful. 

Section 2. And be it further enacted by the authority aforesaid, 
That from and after the day aforesaid, any person or persons who 
shall sell or expose to sale, or cause to be sold or exposed to sale, 
or shall keep on hand for the purpose of sale, or shall advertise, 
or cause to be advertised for sale, or shall aid and assist, or be in 
any wise concerned in the sale or exposure to sale, of any lottery 
ticket or tickets, or any share or part of any lottery ticket, in any 
lottery or device in the nature of a lottery, within this common- 
wealth or elsewhere; and any person or persons who shall purchase 
any such ticket or tickets, or share or part of any such ticket or 
tickets; and any person or persons who shall advertise or cause to 
be advertised, the drawing of any scheme in any lottery, or be in 
any way concerned in the managing, conducting, carrying on, or 
drawing, of any lottery or device in the nature of a lottery, and 
shall be convicted thereof in any court of competent jurisdiction, 
shall, for each and every such offence, forfeit and pay a sum not 
less than and not exceeding dollars; or be sentenced 

to undergo an imprisonment not exceeding months, at the 

discretion of the court. 

Section 3. Andbeit further enacted by the authority aforesaid, 
That if the said The Union Canal company of Pennsylvania shall 
consider that under and by virtue of any acts of Assembly heretofore 
passed and now in force, they are entitled to raise by way of lotte- 
ry, any other and further sum or sums of money than by the said 
day of shall have been raised by the lotteries by them 

authorised, it shall and may be lawful for them to institute a suit in 
the Supreme court in the city of Philadelphia, against the common- 
wealth of Pennsylvania, in which suit the said The Union Canal 
company of Pennsylvania, shall by a statement in the nature of a 
petition of right, or of a bill in equity, set forth fully and at large the 
nature arid extent of their claim; and the Attorney General shall, 
on behalf of this commonwealth, appear to the said suit, and make 
defence therein* and the said court shall have power to maintain 
and try the said su\t, and to make such orders therein as may be 
necessary or expedient for the trial thereof on its merits, and a ju- 
ry shall be summoned as on other cases between individuals; and 
if on the trial of the said suit it shall appear that the whole amount 
of money which by any laws now in force, the said company is 
entitled to raise by way of lottery, has not been raised, and that 
the said company is entitled by the said laws to raise a further 
sum, the jury under the direction of the court as in other cases, 
shall find the amount deficient, and the court shall give judgment 
therefor; and the Governor shall draw his warrant for such 



37 

amount on the State Treasurer in favor of the said company. But 
if it shall appear that the whole of the said money has been raised 
by the lotteries drawn before the aforesaid day of then 

the jury under the direction of the court as aforesaid, shall find the 
time by which the said amount was raised; and the same shall be 
entered of record; and all lotteries made or drawn since the time 
aforesaid shall as against the said The Union Canal company of 
Pennsylvania, and all persons claiming under the said company, be 
deemed and taken to be unlawful and unauthorised lotteries, and 
to subject all persons concerned therein to the penalties by law im- 
posed on those concerned in unauthorised lotteries. 

Section 4. And be it further enacted by the authority aforesaid, 
That the said suit shall be tried at nisi prius, or by a jury at the 
bar of the court in bank, as the said court shall direct; and the 
said court shall have the same power as in other cases, to award a 
new trial, if in their judgment error has been committed or injus- 
tice done. 

Section 5. And be itjurther enacted by the authority aforesaid, 
That nothing in this act contained, shall be construed to affect or 
impair any contract made between any lottery manager, agent, or 
broker, and any other person or persons, for the sale of any lottery 
ticket or tickets, in any lottery or lotteries heretofore authorised 
by the said company, and drawn before the aforesaid day of 

; nor to invalidate the right of such persons to recover the 
consideration money for any such lottery ticket or tickets; but all 
such contracts and rights shall be and remain as if this act had 
net been passed. 



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